As Above So Below

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All last week, I fixated on three layers of not only the 4 indices, with Granddad Russell 2000, my main man, but also on the rest of the Modern Family members (XRT, IYT, SMH, KRE, IBB) plus gold, interest rates and real estate.

The bounce off of last Monday’s lows, which felt like eating layer cake with chocolate frosting before dinner, may have seen the peak on Friday.

Why?

The 3 Layers consist of the 2015 trading range, July 6-month calendar range and phases, particularly how many phases each member and friend has traded within thus far this year.

The Dow (DIA) traded right up to the 200 daily moving average and the July 6-month calendar range low and stalled. The Phase is negative-distribution. That’s about as clean as it gets and certainly makes the case for a hard week coming up unless we see a gap up over 177.60.

Last week after IWM held the 200 DMA and cleared back over the July 6-month calendar range low, I anticipated a rally to around 124. Friday’s high was 123.67. That could very well mean the rally took its course. It could also mean that some digestion makes sense as many smaller cap names get ready to report earnings this week, and then the rally continues.

NASDAQ (QQQ), Lord of the Flies, not as clean as DIA technically speaking, yet even with the bullish phase, breakout above the July 6-month calendar range high (at 110.81), it remains best hope, but hope needs to spur the others pronto.

Semiconductors (SMH), a Modern Family sibling, has the most to lose as we head into this week. 51.87 is the July 6-month calendar range low to hold. The 2015 trading range already broke down and the phase now in distribution, can easily deteriorate further to a bearish phase.

Looking at Gold (GLD), considering it has broken everything-2015 range, calendar range lows plus has been in a bearish phase since September 2014, it has to clear 106 or that too needs a sharp reversal pattern to avoid lower prices.

Interest Rates (TLT) have support at 120.57, the July 6-month calendar range high. Phase is recovery and a return over 122.97 takes it back over the original 2015 trading range low. A break of 120.57 most likely means the correction from the recent lows at 115 is done.

With momentum stocks stable, small caps mixed, chip stocks vulnerable, gold waffling at the lows while interest rates ease-seems our sugary layer cake we ate for dinner last week, generated hyperglycemia.

S&P 500 (SPY) 209.60 has to hold

Russell 2000 (IWM) 124-125 resistance with 121.24 key support

Dow (DIA) Continues to stall at the 200 DMA. 177.52 has to clear or lower prices in store

Nasdaq (QQQ) 112.25 now tested twice last week big resistance with 109.86 support

XLF (Financials) 25.35 next point to clear with 24.90 point to hold

KRE (Regional Banks) Over 43.90 gets interesting otherwise, all last week did was create a bear flag against the 50 DMA

IYT (Transportation) Performed really well last week and now must hold over 148.70

IBB (Biotechnology) Although it’s holding the 50 DMA, the test and bounces from it weakened.

XRT (Retail) Has to hold 97.52 the July range low. If clears 100 again, now that would be impressive

IYR (Real Estate) Another group that could take some leadership if it holds 74.00.

XHB (US HomeBuilders) New highs Friday-puts this in a buy the dip scenario unless has a sharp U-turn from the highs

USO (US Oil Fund) Made new lows on Friday for the year-taking its toll.

TAN (Guggenheim Solar Energy) I am waiting for a clean reversal pattern which means has to make new lows first

UUP (Dollar Bull) Looks firm

EEM (Emerging Markets) If rates stay low, could try to hold recent lows and move higher

IFN (India Fund) Looks good

FXI (China Large Cap Fund) 40.00 key

PHO (Water) Traded exactly at the 24.00 resistance and retreated.